UK jobs: Watch out for pay growth - HSBC

HSBC Analysts offer their thoughts on what to expect from today’s UK labour market report due on the cards at 0830 GMT.

Key Quotes:

“UK unemployment dropped to 4.3% in the three months to July, the lowest since 1975, and 0.2ppts below the BoE's estimate of equilibrium unemployment.

This continued strength in job creation fed into the BoE's more hawkish stance and we don't expect any signs of weakening in this release: we expect unemployment will remain at 4.3% but the risks are skewed to another fall. By contrast, regular pay growth should remain sluggish, potentially slipping back below 2%. The BoE has signalled it sees positive signs in private sector pay growth on a 3-month annualised basis, so this measure may be one to watch out for.”